Most employees in the U.S. are protected by federal wage laws, state wage laws, or both.
If you believe your employer has violated wage and hour laws—for example by failing to pay you minimum wage or overtime—you can file a lawsuit to recover your unpaid wages.
However, you only have a limited amount of time to file your suit. In legal terms, this time limit is called the “statute of limitations.”
Time to File Under Federal Law
Under the Fair Labor Standards Act (FLSA), you must typically file your lawsuit within two years of the date of your employer’s wage violation.
If the wage violation is ongoing, you will only be allowed to recover unpaid wages for the two years prior to filing your claim. For example, suppose you are claiming that your employer has failed to pay you minimum wage since January 1, 2022. If you wait until June 1, 2025 to file your lawsuit, you'll only be allowed to seek unpaid wages from June 1, 2022 to June 1, 2025.
The statute of limitations is extended to three years if your employer’s violation of the FLSA was willful. An FLSA violation is considered to be willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard as to whether its conduct was prohibited by the FLSA.
Time to File an Unpaid Wage Claim Under State Law
Most states have their own wage and hour laws with their own time limits for filing a wage lawsuit. The time limits may vary depending on what type of wage violation your employer committed.
For example, in New Jersey, the time limit is two years for minimum wage and overtime violations and six years for all other wage violations. In California, most wage violations are subject to a three-year statute of limitations.
Wage Claim Versus Lawsuit
For violations of the FLSA, you can file a wage claim with the U.S. Department of Labor’s Wage and Hour Division. However, you should file your claim well before the two-year statute of limitations expires. That way, you will still have enough time to file a lawsuit if you are not able to resolve your claim through the Department of Labor’s administrative process.
In many states, you can also file a wage claim with your state department of labor. However, some states have different time limits for filing a wage claim. For example, in Delaware, you must file your wage claim at least 90 days before the statute of limitations on your wage claim is set to expire. And, some states only accept wage claims under a certain amount. For example, in New Jersey, you can only file a wage claim worth $30,000 or less.
Damages Available in a Claim for Unpaid Wages
If you prevail on a wage claim, your damages might include:
- any unpaid wages, plus interest
- attorneys' fees
- litigation costs, and
- additional penalties, depending on state law.
Check with your state's labor department for more information about the types of damages you might be entitled to.
Good-Faith Defenses to Wage and Hour Claims for Employers
There are two good faith defenses available to employers facing wage-hour claims. These are based on §§ 10 and 11 of the Portal-to-Portal Act, 29 U.S.C. § 251 et seq.
The first defense allows employers to avoid liability altogether; the second limits the damages an employee may collect.
Section 10: The Absolute Good-Faith Defense
The good faith defense based on Section 10 of the Portal-to-Portal Act excuses an employer’s violation of the FLSA’s minimum wage and overtime requirements if the employer can prove that it acted in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation of the Wage and Hour Division of the U.S. Department of Labor.
In other words, if the Department of Labor interpreted the FLSA to allow the employer’s actions, the employer won’t be liable for them.
Even if the Department of Labor later rescinds the ruling on which the employer relied, the employer can avoid liability as long as its actions were allowed when taken. For example, if an employer decides that its assistant managers are not entitled to overtime based on an opinion letter of the Administrator of the Wage and Hour Division, it will not be liable for that decision – even if the opinion letter is overturned later.
This defense applies only in relation to a written ruling, policy, regulation or order of the Wage and Hour Administrator. It cannot be based on conversations between an attorney and a district director of the Wage and Hour Division. Nor can the reliance relate to the rulings or regulations of another governmental agency.
If your employer succeeds in proving that this defense applies, it won’t be liable for damages.
Section 11: Good-Faith Defense to Liquidated Damages
Under Section 11 of the Portal-to-Portal Act, you can avoid or reduce a liquidated damages award if you can prove that you acted in good faith, with reasonable grounds to believe you were not violating the FLSA.
The FLSA allows for two types of damages:
- back pay: the wages and other compensation the employee should have received if you had followed the law, and
- liquidated damages: an award equal to the back pay award, intended to punish employers for violating the law.
If your employers uses the Section 11 defense, it will still be liable for breaking the law and will have to pay the back pay award. However, it can reduce or avoid the additional award for liquidated damages.
To use the Section 11 defense, your employer must show that it acted with actual good faith: an honest intention to do the right thing, with no reason to believe it was violating the law.
It must also show that it had reasonable grounds to believe it was not violating the law. In some cases, for example, employers have succeeded in using this defense by showing that they relied on their lawyer’s legal advice that their conduct was correct under the FLSA.
For information on the Fair Labor Standards Act, see our Wage and Hour FAQ. Find out more about FLSA damages in Liquidated Damages and Punitive Damages Under the FLSA.
Consult With an Employment Lawyer
If you are owed unpaid pages, you may want to consult with an employment lawyer. A lawyer can identify all of the wage laws that your employer has violated, some of which you may not even be aware of.
A lawyer can also help you file a wage claim or lawsuit well before any applicable deadlines, to ensure that both your federal and state law claims are preserved. (For more information, see Unpaid Wages: Do You Need a Lawyer?)